Saudi concerned about tight spare oil capacity - Mr Falih

Riyadh accuses Tehran of supplying the Houthi militants in Yemen with ballistic missiles, which are being fired at the Kingdom.

It has instructed citizens, upon hearing the alert, to seek shelter in secure locations and avoid "areas prone to air strikes and missile strikes".

Mr Falih said Saudi Arabia is not targeting a specific price for oil, discounting a May 4 report in The Wall Street Journal that Riyadh wants to oil to hit at least United States dollars 80 a barrel this year.

Saudi Arabia accused Iran of "taking advantage of the revenue generated by the lifting of the sanctions to destabilize the region", the foreign ministry said.

Colonel Turki al-Malki, spokesman for the US -backed Saudi-led coalition fighting in Yemen, said in a statement that Saudi air defences had intercepted one missile, with another falling in an uninhabited desert south of the city.

"Our air-defense systems intercepted two ballistic missiles over Riyadh and a third that was sacked toward Jizan", the Al-Ekhbariya television channel reported, according to Anadolu Agency (AA).

According to eyewitnesses, panic stirred in the city after four consecutive booms were heard in the city.

State-run Saudi Press Agency said the country's air defences hours earlier had also intercepted a ballistic missile targeting the southern city of Jizan.

The Houthis said the missiles were launched at economic targets in Riyadh, the group's al-Masirah TV reported.

Saudi Arabia indicated on Wednesday that it could raise its oil output to offset any potential supply shortage as a result of new sanctions on Tehran, after U.S. President Donald Trump said Washington was withdrawing from the Iran nuclear deal.

The kingdom has responded to missile attacks with airstrikes.

Saudi Arabia launched a military coalition in Yemen in 2015, aimed at rolling back the Huthis and restoring the internationally recognised government to power.